Foncière des Régions is proposing to buy out its 52.4%-owned subsidiary, Italy-based Beni Stabili SpA SIIQ, offering 8.5 of its shares per 1,000 Beni Stabili shares.
The French diversified real estate company plans to hold discussions with Beni Stabili to review the terms and conditions of a potential merger, which will be subject to the approval of Beni Stabili's independent board members committee, as well as of both companies' boards of directors and extraordinary general meetings.
Depending on the outcome of the talks, the merger is slated to completed by the end of 2018, Foncière des Régions said in a release.
The merger is expected to boost the French company's exposure to Milan, improve its profitability and accelerate its development pipeline. The company, which would also seek a dual listing in Paris and Milan, plans to enlist an investment service provider to acquire Beni Stabili shares on the market.
Foncière des Régions said the merger would have a slightly accretive impact of around 1% on earnings as defined by the European Public Real Estate Association and net asset value per share, while increasing its market capitalization by about €700 million to more than €7 billion.
Additionally, Foncière des Régions revealed its plans to rebrand before the summer to "fully reflect its Pan-European footprint."
The company added that the merger would result in higher liquidity for Beni Stabili shareholders and increase the company's dividend per share by 16%.
Separately, Beni Stabili said its board is mandating Lazard as a financial adviser on the potential merger. The board will meet by the end of May to evaluate and approve the deal.
